Business Plan for Everyone. Made easy

Business PlanBusiness Plan

Essential steps towards preparing Essential steps towards preparing a professional plana professional plan

Sections of a business planSections of a business plan

cover page.cover page. table of contentstable of contents executive summary or overviewexecutive summary or overview management and organisationmanagement and organisation product/service planproduct/service plan marketing planmarketing plan financial planfinancial plan operating and control systemsoperating and control systems growth plangrowth plan appendixappendix

Cover pageCover page

Name of companyName of company Address, fax, phone, email, webAddress, fax, phone, email, web LogoLogo Picture of product if appropriatePicture of product if appropriate Protection statement Protection statement

““The contents of this plan are proprietary The contents of this plan are proprietary and confidential. It is not to be copied or and confidential. It is not to be copied or duplicated in any way.duplicated in any way.””

Table of contentsTable of contents

Sections of plan with page numbersSections of plan with page numbers Maybe add tabs to the plan for easy Maybe add tabs to the plan for easy

reference reference Include a table of contents page for your Include a table of contents page for your

appendicesappendices Include a title page for every exhibit in Include a title page for every exhibit in

the appendixthe appendix

Executive SummaryExecutive Summary

Owner/CEOOwner/CEO’’s vision of the future for the businesss vision of the future for the business Company history if any - very briefCompany history if any - very brief What is the business area?What is the business area? What is the current stage of development?What is the current stage of development? What is unique about the product or service?What is unique about the product or service? What form of organisation?What form of organisation? Key management. Key support groups.Key management. Key support groups. Overview of marketing plan.Overview of marketing plan. Competitors.Competitors. How much funding is needed? How much is already invested?How much funding is needed? How much is already invested? How long to break even?How long to break even? Debt or equity?Debt or equity? Exit strategyExit strategy

Management & OrganisationManagement & Organisation

Management teamManagement team Compensation and ownershipCompensation and ownership Contracts and franchise agreementsContracts and franchise agreements Board of directors/Advisory councilBoard of directors/Advisory council Infrastructure/outside advisorsInfrastructure/outside advisors InsuranceInsurance ESOP and other incentivesESOP and other incentives Organisation chartsOrganisation charts

Common mistakesCommon mistakes

Hiring friends or relativesHiring friends or relatives Too low qualifications levelsToo low qualifications levels No non-compete contractsNo non-compete contracts Giving away too much ownershipGiving away too much ownership Not enough incentives for good staffNot enough incentives for good staff No highly qualified outside directorsNo highly qualified outside directors

Product/Service PlanProduct/Service Plan

Purpose of the productPurpose of the product Unique featuresUnique features Stage of developmentStage of development Future research and developmentFuture research and development Trademarks, copyrights, licences and royaltiesTrademarks, copyrights, licences and royalties Government approvalsGovernment approvals Production limitationsProduction limitations Product liabilityProduct liability Related services and spinoffsRelated services and spinoffs ProductionProduction Manufacturing facilities, if applicableManufacturing facilities, if applicable Environmental factorsEnvironmental factors


Too technical or too broadToo technical or too broad No unique features or special benefitsNo unique features or special benefits Failure to show all product costsFailure to show all product costs Failure to list requirements of regulatory Failure to list requirements of regulatory

agenciesagencies Not proving the product is technically feasibleNot proving the product is technically feasible No backup suppliers or subcontractorsNo backup suppliers or subcontractors No innovative production procedures early onNo innovative production procedures early on

Marketing PlanMarketing Plan

Industry profileIndustry profile Competition profileCompetition profile Customer profileCustomer profile Target-market profileTarget-market profile Pricing profilePricing profile Gross margins on productsGross margins on products Market penetrationMarket penetration Advertising and promotionAdvertising and promotion Packaging and labelingPackaging and labeling Service and warrantiesService and warranties Trade showsTrade shows Future marketsFuture markets


Deciding there is no Deciding there is no competitioncompetition

Under or over estimation Under or over estimation strength of the competitionstrength of the competition

No strategy for countering No strategy for countering competitioncompetition

Unrealistic market share Unrealistic market share projectionsprojections

Pricing not in line with market Pricing not in line with market realitiesrealities

Addressing the market Addressing the market universally, not segmentallyuniversally, not segmentally

No adequate sales trainingNo adequate sales training

Misjudging true cost of Misjudging true cost of penetrating the marketpenetrating the market

Assuming the distribution Assuming the distribution system will give your system will give your product/service equal timeproduct/service equal time

Selecting the largest target Selecting the largest target market instead of the easiestmarket instead of the easiest

Failure to explain and defend Failure to explain and defend pricing strategypricing strategy

Establishing pricing based Establishing pricing based only on costsonly on costs

Failing to recognise price Failing to recognise price sensitivitysensitivity

Financial PlanFinancial Plan

AssumptionsAssumptions Cash-Flow ProjectionsCash-Flow Projections Profit and Loss StatementProfit and Loss Statement Balance SheetBalance Sheet


Unrealistic sales and profit projections.Unrealistic sales and profit projections. No reasonable assumptionsNo reasonable assumptions Failure to identify hidden costs.Failure to identify hidden costs. Too high a risk when considering potential ROIToo high a risk when considering potential ROI Salaries and other benefits out of line for a startup.Salaries and other benefits out of line for a startup. Failure to project downside if sales forecasts unmetFailure to project downside if sales forecasts unmet Financially documents mathematically in errorFinancially documents mathematically in error Figures on various financial documents not Figures on various financial documents not

consistentconsistent

Operating & Control SystemsOperating & Control Systems

Administrative policies, procedures and Administrative policies, procedures and controlscontrols

Documents and paper flowDocuments and paper flow Planning chart (Gantt Chart, CPA)Planning chart (Gantt Chart, CPA) Risk analysis and alternative plans of Risk analysis and alternative plans of

actionaction Salvaging assets (firesale value if Salvaging assets (firesale value if

business fails)business fails)


Failure to keep important Failure to keep important business records.business records.

Failure to establish procedures Failure to establish procedures that trace and control the flow of that trace and control the flow of cash.cash.

No control over receivablesNo control over receivables No control over inventory.No control over inventory. No policy and procedures No policy and procedures

manual.manual. No security system to protect No security system to protect

trade secrets, customer lists.trade secrets, customer lists. Failure to prioritise major Failure to prioritise major goalsgoals Failure to have a fallbackFailure to have a fallback

Failure to identify key Failure to identify key responsibilities of the responsibilities of the management teammanagement team

No contingency plans if No contingency plans if schedule cannot be met.schedule cannot be met.

Failure to review schedule if Failure to review schedule if conditions change.conditions change.

Failure to identify key goals.Failure to identify key goals. Failure to identify Failure to identify

uncontrollable variables.uncontrollable variables. Failure to assess riskFailure to assess risk Failure to mention legal Failure to mention legal

liabilityliability

Growth PlanGrowth Plan

New offerings to marketNew offerings to market Capital requirementsCapital requirements Personnel requirementsPersonnel requirements Exit strategyExit strategy


Failure to identify and prioritise major new products Failure to identify and prioritise major new products or services to support future growth.or services to support future growth.

Overestimating revenue from these new products.Overestimating revenue from these new products. Not planning the exit needed for investors.Not planning the exit needed for investors. Inadequate management team and support groups to Inadequate management team and support groups to

execute the growth plan.execute the growth plan. Failure to identify capital expenditure costs needed Failure to identify capital expenditure costs needed

for growth.for growth. Failure to have a proper system to control operations Failure to have a proper system to control operations

during periods of growth.during periods of growth.

AppendixAppendix

Detailed resumes of the Detailed resumes of the management team. Highlight management team. Highlight relevant qualifications relevant qualifications

All employee contracts, ESOPSAll employee contracts, ESOPS Personal financial statements for Personal financial statements for

each of the principalseach of the principals Copies of patents, copyrightsCopies of patents, copyrights Actual documents of;Actual documents of;

partnershipspartnerships distributor contractsdistributor contracts non-compete contractsnon-compete contracts corporate bylawscorporate bylaws all other relevant documentsall other relevant documents

Copies of product/service Copies of product/service brochuresbrochures

Reference lettersReference letters Market studiesMarket studies Business or operating manualsBusiness or operating manuals Customer signed orders or LOICustomer signed orders or LOI Magazine articles, demographicMagazine articles, demographic Detailed description of high tech Detailed description of high tech

productsproducts A map showing location of the A map showing location of the

businessbusiness A copy of credit reports on the A copy of credit reports on the

businessbusiness Last three years of tax returns Last three years of tax returns

and any other historical financial and any other historical financial informationinformation


Exhibits difficult to readExhibits difficult to read No explanation on how to read and No explanation on how to read and

interpret technical information giveninterpret technical information given Failure to list the source of informationFailure to list the source of information Failure to list the date of informationFailure to list the date of information Inconsistencies in the dataInconsistencies in the data Misspelled words in the exhibitsMisspelled words in the exhibits

Evaluating the Business PlanEvaluating the Business Plan

Business Plan Evaluation Business Plan Evaluation QuestionsQuestions What is the business concept?What is the business concept? List key members of the teamList key members of the team Compare salaries with similar Compare salaries with similar

industries.industries. List company advisorsList company advisors List proprietary rightsList proprietary rights Describe uniqueness of the Describe uniqueness of the

product/serviceproduct/service Shelf life of the product/serviceShelf life of the product/service List customer needsList customer needs What is the payback to the end What is the payback to the end

user?user? List target markets and indicate how List target markets and indicate how

much money the company can much money the company can obtain from each.obtain from each.

Explain the methods of target Explain the methods of target market penetration, showing they market penetration, showing they are compatible with industry are compatible with industry standards.standards.

List cost of each market List cost of each market penetration strategy.penetration strategy.

Is the marketplace big enough for Is the marketplace big enough for this management team?this management team?

Does the company have the Does the company have the financial resources needed to financial resources needed to succeed in this venture. Where is succeed in this venture. Where is any extra money sourced?any extra money sourced?

Examine the financial Examine the financial assumptions section. List any assumptions section. List any unsound assumptionsunsound assumptions

Business Plan Evaluation Business Plan Evaluation QuestionsQuestions Can the entrepreneur explain all Can the entrepreneur explain all

financial projections without financial projections without outside assistance?outside assistance?

Has the entrepreneur been in this Has the entrepreneur been in this business before?business before?

Are the companyAre the company’’s control s control systems adequate? List areas systems adequate? List areas that could be improved.that could be improved.

What information has been What information has been learned from talking to others in learned from talking to others in the same industry.the same industry.

What was said about the venture What was said about the venture after it was critiqued by after it was critiqued by accountants, lawyers, accountants, lawyers, management consultants?management consultants?

What was said about the What was said about the management team after you management team after you talked with people who know talked with people who know them?them?

Describe what Describe what advantages/disadvantages the advantages/disadvantages the venture has over competition.venture has over competition.

Is the pricing structure adequateIs the pricing structure adequate List the major problems that could List the major problems that could

occur in the future, and note if the occur in the future, and note if the business plan provided an business plan provided an adequate solution.adequate solution.

Identify the money sources Identify the money sources needed by the company for needed by the company for growth.growth.

Business Plan Evaluation Business Plan Evaluation QuestionsQuestions Describe the exit the company Describe the exit the company

will take to satisfy the will take to satisfy the management team, banks, management team, banks, investors. List the projected time investors. List the projected time frames for the exit.frames for the exit.

Describe how the company or Describe how the company or subcontractors will produce subcontractors will produce needed products/services to needed products/services to satisfy sales projections.satisfy sales projections.

List all backup suppliers.List all backup suppliers. List the capital expenditures List the capital expenditures

needed for the companyneeded for the company’’s s growth. Are these expenditures growth. Are these expenditures adequate?adequate?

Does this venture Does this venture have a high chance have a high chance of success?of success?

If yes, what are the If yes, what are the most important most important reasons why?reasons why?

If not, list the If not, list the negative factors.negative factors.